Massachusetts Cuts Energy Costs Through Competitive Procurement
Massachusetts Cuts Energy Costs Through Competitive Procurement
The successful completion of a retail electric power procurement for the Commonwealth of Massachusetts is expected to save $6.2 million in electricity costs over the next three months alone. The procurement was completed under the terms of a multi-year contract with the Commonwealths Operational Services Division (OSD) and World Energy, a provider of energy information and on-line procurement of electricity and gas.
The goal of OSD is to reduce the impact of electric rate increases, help avoid price spikes and ensure that the Commonwealth is paying the lowest possible rates for electricity. For six months preceding the procurement, World Energy worked with OSD to bring together numerous agencies throughout the Commonwealth, including the executive agencies, Massachusetts Turnpike Authority, the court system, area colleges, towns and non-profit organizations, so that their energy requirements could be aggregated.
The goal was to increase the size of the electricity load to give prospective suppliers an incentive to reduce their costs. As a result, an unprecedented 66 different agencies cooperated to participate in the November electricity procurement, and the Commonwealth was able to obtain a long-term, fixed-price competitive supply contract for 278 large commercial accounts that is well below the rates offered by local utilities.
Based on the way bids were structured, we were able to take an approach which served accounts of various sizes and in locations throughout the state in one procurement. This reduced administrative costs for the Commonwealth and participating agencies, said Rich Domaleski, World Energy CEO. Simply based on utility rates published for the first three months of 2006, this contract will save the Commonwealth upwards of $6.2 million, and its a great way to minimize the impact of increasing energy costs on taxpayers.
For more information, visit: http://www.worldenergy.com .
